PROPOSED RULEMAKINGS

BUREAU OF PROFESSIONAL AND OCCUPATIONAL AFFAIRS

[ 49 PA. CODE CH. 43b ]

Schedule of Civil Penalties—Accountants

[41 Pa.B. 4535]
[Saturday, August 20, 2011]

 The Commissioner of Professional and Occupational Affairs (Commissioner) proposes to amend § 43b.10a (relating to schedule of civil penalties—accountants) to read as set forth in Annex A.

Statutory Authority

 Section 5(a) of the act of July 2, 1993 (P. L. 345, No. 48) (Act 48) (63 P. S. § 2205(a)) authorizes the Commissioner, after consultation with the licensing boards in the Bureau of Professional and Occupational Affairs (Bureau), to promulgate schedules of civil penalties of up to $1,000 for minor violations of the enabling acts and regulations of Bureau licensing boards.

Background and Purpose

 Under authority of Act 48, the Bureau agents issue citations and impose civil penalties in accordance with schedules of civil penalties adopted by the Commissioner in consultation with Bureau licensing boards. Act 48 citations streamline the disciplinary process by eliminating the need for formal orders to show cause, answers, adjudications and orders, and consent agreements. At the same time, respondents who receive Act 48 citations retain their due process right of appeal prior to imposition of discipline. The use of Act 48 citations has increased steadily since 1996, when the program was first implemented. Act 48 citations have become an important part of the Bureau's enforcement efforts, with approximately 30% of all sanctions imposed by the Bureau licensing boards being accomplished through the Act 48 citation process.

 Under the authority of Act 48, the Commissioner published a statement of policy at 28 Pa.B. 5883 (November 28, 1998) establishing Act 48 civil penalties for certain violations of the CPA Law (act) (63 P. S. §§ 9.1—9.16b) and the regulations of the State Board of Accountancy (Board) in §§ 11.1—11.86. The Commissioner published a final-form rulemaking at 31 Pa.B. 1227 (March 3, 2001) that replaced the statement of policy with identical Act 48 civil penalties. The Commissioner has now determined, based on input from the Board, that the Act 48 civil penalties for violations of the act and the Board's regulations require updating to further improve the efficiency of the Bureau's enforcement efforts.

 The Commissioner proposes to do the following: increase the Act 48 civil penalty for one continuing professional education (CPE) violation; add Act 48 civil penalties for additional CPE violations; eliminate the Act 48 civil penalty for a CPE violation that is no longer recognized under the act; restrict the applicability of Act 48 civil penalties for certain violations involving the unauthorized use of professional designations and other unauthorized representations; and make editorial changes to the descriptions of violations for which Act 48 civil penalties are assessed.

Description of Proposed Amendments

 The proposed rulemaking would increase the Act 48 civil penalty for first and second offenses regarding failure to complete at least 20 CPE hours in each year of a CPE reporting period as required under § 11.62(b) (relating to credit-hour requirement). The proposed rulemaking also would add Act 48 civil penalties for first and second offenses regarding failure, during each CPE reporting period, to complete 80 CPE hours overall, including 16 hours in accounting and attest subjects, 8 hours in tax subjects and 4 hours in professional ethics, as required under section 8.2(b) of the act (63 P. S. § 9.8b(b)) and § 11.63(a)(1), (6) and (7) (relating to continuing ed- ucation subject areas). Third and subsequent offenses for these violations would continue to be handled through formal action (that is, issuance of an order to show cause). The proposed rulemaking would reflect that the violation relating to failure to timely submit documentation of CPE hours, the first offense of which is punishable by an Act 48 civil penalty, is in § 11.67(b) (relating to reporting of continuing education credit hours). A second and subsequent offense for this violation would continue to be handled through formal action.

 The Board has contemporaneously submitted a proposed rulemaking, published at 41 Pa.B. 4541 (August 20, 2011), that, among other things, proposes to do the following: relocate existing CPE requirements to the sections previously referenced; establish the professional ethics requirement previously referenced; require a licensee to make up a CPE deficiency within 6 months after imposition of a disciplinary sanction for noncompliance; and provide that a licensee's failure to timely satisfy a CPE deficiency will result in the automatic suspension of the licensee's professional credentials until the deficiency is satisfied.

 The proposed rulemaking would eliminate the Act 48 civil penalty for violating section 8.2(b) of the act by completing CPE hours after the end of a CPE reporting period but before the start of the next license period. When the current schedule of Act 48 civil penalties was adopted in 1998, a CPE reporting period ended on December 31 of each odd-numbered year while a license period ended on April 30 of each even-numbered year. Since 2008, the reporting period and license period have been coextensive, with both ending on December 31 of each odd-numbered year.

 The proposed rulemaking would restrict the applicability of Act 48 civil penalties for the first-time unauthorized use of the titles ''certified public accountant'' and ''public accountant,'' the abbreviations ''CPA'' and ''PA'' and similar representations, as prohibited under section 12(a), (c) and (j) of the act (63 P. S. § 9.12(a), (c) and (j)), to those individuals and entities that have never been credentialed by the Board as certified public accountants, public accountants or public accounting firms. The Board prefers that certified public accountants, public accountants and public accounting firms that use professional designations after their licenses have lapsed be charged with the unlicensed practice of public accounting under section 12(q) of the act, which the Board has always enforced through formal action, fashioning each disciplinary sanction on a case-by-case basis by taking into account the length of time that a license has lapsed and the type of accounting activities performed.

 The proposed rulemaking also would restrict the applicability of an Act 48 civil penalty for the first-time unauthorized representation of membership in a professional accounting society, association or organization, as prohibited under section 12(o) of the act, to those individuals and entities that have never been credentialed as certified public accountants, public accountants or public accounting firms. It is not unlawful under section 12(o) of the act for certified public accountants, public accountants and public accounting firms with lapsed licenses to represent their professional membership affiliations.

Fiscal Impact

 The proposed rulemaking would not impose additional costs on the regulated community because civil penalties may be imposed in any disciplinary proceeding, whether initiated by an Act 48 citation or by formal action. Rather, because the majority of disciplinary sanctions imposed by the Board involve first-time violations of CPE requirements, the regulated community should realize some savings, in the form of less time spent on paperwork and reduced legal fees, from the transfer of most CPE disciplinary proceedings to the streamlined procedures authorized by Act 48. It is not possible to give a reliable estimate of these savings.

 The proposed rulemaking should also result in savings for the Board and the Bureau's Prosecution and Counsel Divisions, which would spend less time on disciplinary proceedings relating to violations of CPE requirements. It is not possible to give a reliable estimate of these savings.

 The proposed rulemaking will not have a fiscal impact on the general public or other agencies and political subdivisions of the Commonwealth.

Paperwork Requirements

 The proposed rulemaking will reduce the overall amount of paperwork associated with disciplinary proceedings relating to violations of CPE requirements. The proposed rulemaking would not create additional paperwork for the general public or other agencies and political subdivisions of the Commonwealth.

Effective Date

 The proposed rulemaking would become effective upon final-form publication in the Pennsylvania Bulletin.

Regulatory Review

 Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on August 8, 2011, the Board submitted a copy of this proposed rulemaking and a copy of a Regulatory Analysis Form to the Independent Regulatory Review Commission (IRRC) and the Chairpersons of the House Professional Licensure Committee (HPLC) and the Senate Consumer Protection and Professional Licensure Committee (SCP/PLC). A copy of this material is available to the public upon request.

 Under section 5(g) of the Regulatory Review Act, IRRC may convey comments, recommendations or objections to the proposed rulemaking within 30 days of the close of the public comment period. The comments, recommendations or objections must specify the regulatory review criteria which have not been met. The Regulatory Review Act specifies detailed procedures for review, prior to final publication of the rulemaking, by the Board, the General Assembly and the Governor of comments, recommendations or objections raised.

Public Comment

 The Commissioner invites interested persons to submit written comments, suggestions or objections regarding the proposed rulemaking to Cynthia Montgomery, Regulatory Counsel, Department of State, P. O. Box 2649, Harrisburg, PA 17105-2649 within 30 days following publication of this proposed rulemaking in the Pennsylvania Bulletin.

KATIE TRUE, 
Commissioner

 (Editor's Note: See 41 Pa.B. 4541 (August 20, 2011) for a proposed rulemaking by the State Board of Accountancy relating to this proposed rulemaking.)

 Fiscal Note: 16A-48. No fiscal impact; (8) recommends adoption.

Annex A

TITLE 49. PROFESSIONAL AND VOCATIONAL STANDARDS

PART I. DEPARTMENT OF STATE

Subpart A. PROFESSIONAL AND OCCUPATIONAL AFFAIRS

CHAPTER 43b. COMMISSIONER OF PROFESSIONAL AND OCCUPATIONAL AFFAIRS

SCHEDULE OF CIVIL PENALTIES, GUIDELINES FOR IMPOSITION OF CIVIL PENALTIES AND PROCEDURES FOR APPEAL

§ 43b.10a. Schedule of civil penalties—accountants.

STATE BOARD OF ACCOUNTANCY

Violation under 63 P. S.	Title/Description	Civil Penalty
Section 9.8b(b)	[Completion of continuing education hours after end of reporting period but before start of next license biennium (assumes no other continuing education violation)] Failure to complete 80 hours of acceptable continuing professional education during reporting period	[1st offense—$150   2nd offense—formal action]   1st or 2nd offense—1 to 20 hour deficiency—$300; 21 to 40 hour deficiency—$600; 41 to 60 hour deficiency—$800; 61 to 80 hour deficiency—$1,000 #   3rd or subsequent offense—formal action
Section 9.12(a)	Unlawful use of ''certified public accountant,'' ''CPA'' or similar representation by person [never licensed] not possessing CPA certificate in good standing	1st offense—$500*   2nd offense—formal action
	[Unlawful use of ''certified public accountant'' ''CPA'' or similar representation by person not currently licensed	1st offense—up to 90 days past renewal deadline—warning; 90 days to 180 days past renewal deadline—$500   2nd offense—formal action]
Section 9.12(c)	Unlawful use of ''certified public accountant,'' ''public accountant,'' ''CPA,'' ''PA'' or similar representation by a firm never licensed	1st offense—$500*   2nd offense—formal action
	[Unlawful use of ''certified public accountant,'' ''public accountant,'' ''CPA,'' ''PA'' or similar representation by a firm not currently licensed	1st offense—up to 90 days past renewal deadline—warning; 90 days to 180 days past renewal deadline—$500   2nd offense—formal action]
Section 9.12(j)	Unlawful use of ''public accountant,'' [or] ''PA'' or similar representation by person never licensed	1st offense—$500*   2nd offense—formal action
	[Unlawful use of ''public accountant,'' or ''PA'' or similar representation by person not currently licensed	1st offense—up to 90 days past renewal deadline—warning; 90 days to 180 days past renewal deadline—$500   2nd offense—formal action]
Section 9.12(o)	Unlawful representation of membership in professional society, association or organization of CPA's or PA's by person not credentialed as CPA or PA or firm [never] not licensed	1st offense—$250*   2nd offense—formal action
	[Unlawful representation of membership in professional society, association or organization of CPA's or PA's by person or firm not currently licensed	1st offense—up to 90 days past renewal deadline—warning; 90 days to 180 days past renewal deadline—$250   2nd offense—formal action]
Violation under 49 Pa. Code[,] Chapter 11
Section [11.62(a)(2)] 11.62(b)	Failure to complete 20 hours of acceptable continuing professional education during each year [(assumes no other continuing education violation)] of reporting period	1st or 2nd offense—[$150] $300   [2nd] 3rd or subsequent offense—formal action
Section 11.63(a)(1)	Failure to complete 16 hours of acceptable continuing professional education in accounting and attest subjects during reporting period	1st or 2nd offense—1-4 hour deficiency—$300; 4-8 hour deficiency—$400; 9-12 hour deficiency—$500; 13-16 hour deficiency—$600 #   3rd or subsequent offense—formal action
Section 11.63(a)(6)	Failure to complete 8 hours of acceptable continuing professional education in tax subjects during reporting period	1st or 2nd offense—$300 #   3rd or subsequent offense—formal action
Section 11.63(a)(7)	Failure to complete 4 hours of acceptable continuing professional education in professional ethics during reporting period	1st or 2nd offense—$300 #   3rd or subsequent offense—formal action
Section [11.68(b)] 11.67(b)	Failure to timely submit documentation of continuing professional education during Board audit (assumes no other continuing education violation)	1st offense—$500   2nd offense—formal action

* The first offense provision does not apply to a situation involving multiple occurrences or a pattern or practice of misconduct.

# When there are violations of both 63 P. S. § 9.8b(b) and 49 Pa. Code § 11.63(a)(1), (6) or (7) (relating to CPE subject areas; relevance to professional competence), a combined civil penalty will not be assessed for both sets of violations. The highest civil penalty will be assessed whether for the violation of 63 P. S. § 9.8b(b) or 49 Pa. Code § 11.63(a)(1), (6) or (7).

[Pa.B. Doc. No. 11-1428. Filed for public inspection August 19, 2011, 9:00 a.m.]

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